When you own your own business, it's easy for credit card debts to become a problem – bills piling up, creditors calling, and you need a way out. The good news is, debt relief can help you save money each month and take control of credit card debts.

Supporting a Family

Credit card debts can add up quickly, especially when families run into unexpected expenses like medical bills, or loss of a job. The good news is there are credit card debt hardship programs that can help you.

Financial Hardships

When you go through tough times and credit card debt start closing in on you – it feels good to know there are debt hardship assistance programs to help you get back on track.

Retire Debt Free

When you're planning for retirement, paying monthly credit card minimums will get in the way of your dreams. The good news is, credit card companies may be willing to reduce your interest rates, waive late fees or even settle debts for much less than you owe.

Creditors Calling?

When you're falling behind with credit card debts and creditors are calling – it feels great to know that there's a debt program to lower your payments and get you out of debt much faster than you ever imagined.

Unexpected Bills

Credit card debts and unexpected medical bills can put you in a real bind. Fortunately, debt relief plans can reduce interest rates, lower monthly payments, and help you get out of debt faster.

Debt consolidation is a debt relief option allowing individuals to combine or "consolidate" multiple higher-interest credit card, or other unsecured debts (such as medical bills, store or gas cards) into a single, more affordable payment each month. Typically, debt consolidation programs are coordinated by debt counselors who customize a "debt management plan" providing consumers with a proven and predictable path to get out of debt.

Pros of Debt Consolidation

Provides proven, predictable program to become debt free

Saves money, reduces interest, waives late fees/penalties

Allows you to pay off debts at a pace that fits your budget

Manages multiple debts via single more affordable payment

Puts you back in control of finances to help reduce stress

Cons of Debt Consolidation

Requires discipline to make single monthly payment

If you default, you revert to original creditor agreement

Creditors not required to accept debt relief proposals

Often takes 3-5 years, or more, to become debt free

While not necessarily harmful to your credit score, will be "noted" on your report

Debt Consolidation Summary

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What to Expect with Debt Consolidation

Summary

Consumer ProtectionsInformation provided by the FTC

New government regulations in place to help protect consumers in need of debt relief.

If you have multiple credit cards and other unsecured debts like medical bills,
doctor bills, store cards, unsecured personal loans, and more – a debt consolidation program coordinated through a debt counselor may be the ideal debt relief option to help you live within a set budget, reduce debts, and get on a path to become debt-free.

How do debt consolidation programs, or debt management plans work?

Typically, debt consolidation programs are coordinated by debt relief specialists, or debt counselors, who conduct brief interviews with you to get details on your credit cards and other debts, as well as how much you can realistically afford to pay each month to get out of debt.

Based on this information, your debt specialist will then customize a "debt management plan" for you. Once you approve the plan, letters will be sent on your behalf to each of your creditors requesting the benefits of debt relief – such as lower interest rates, a waiving of late fees and penalties, and generally more favorable repayment terms. Those creditors who accept the proposals are then added to the debt consolidation or debt management program. For those that do not accept debt relief proposals, you are still obligated to live up to the original terms of your cardholder agreement.

It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt consolidation or debt management as part of your free debt relief analysis and savings estimate.

Debt Settlement Pros & Cons

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Debt Settlement

By Walter E. Burch

Debt settlement is a debt relief option that has become increasingly popular among people who need relief from high-balance credit cards (typically $20,000 to $125,000 or more). Through debt settlement, debt specialists negotiate with creditors on your behalf – with the goal of "settling" your credit card debt for substantially less than you currently owe.

Pros of Debt Settlement

By settling debt, you can save a substantial amount of money

Can help you settle credit cards in as little as 12-36 months

Allows you to make low monthly payments you can afford

Settles debt and provides alternative to bankruptcy

While negative to credit, not as severe or long-lasting as bankruptcy

Unless "attorney-based" fees only paid after successful settlement

Cons of Debt Settlement

Typically only benefits those with high-balance credit cards

Amount of money saved through debt settlement subject to taxes

Requires discipline to "set aside" money for successful settlement

Creditors may threaten, or take, legal action to collect debt

Negative impact on credit due to default on credit agreements

Creditors may not agree to accept your debt settlement offer

What to Expect with Debt Settlement

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What to Expect with Debt Settlement

Summary

If you have one or more high-balance credit cards and are going through financial hardship – credit card companies may agree to "settle" your credit card debt for substantially less than you currently owe.

How does debt settlement work? A debt relief specialist will review your current credit card debts and the amount of money you can afford to set aside each month to accumulate a "settlement fund". Debt specialists will then negotiate with credit card companies on your behalf with the goal of settling debt for substantially less than you currently owe.

How much debt settlement could potentially save depends largely on the amount of credit card debt involved, your current financial circumstances – and the settlement policies of credit card companies.

It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt settlement or debt negotiation as part of your free debt relief analysis and savings estimate.

Do-It-Yourself Debt Relief

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Do-It-Yourself Debt Relief

By Walter E. Burch

There are many well-respected self-help credit and debt experts who provide a wealth of valuable advice on the wise use of credit and how to become debt free – experts such as Dave Ramsey, Suzie Orman, Clark Howard, and many others. But regardless of the system you follow – the first step in a successful do-it-yourself debt relief program is to do everything possible to live within your means – avoiding unnecessary "impulse" purchases that cause debts to spiral out-of-control. By creating and maintaining a realistic budget, you will avoid taking on additional debt.

In addition, you can take steps on your own to reduce existing debt by contacting creditors directly to request more favorable interest rates or terms, or offer to settle debt for less than the full amount owed.

The bottom line: If you have high-interest credit cards and other debts and are struggling to make ends meet – you are in need of debt relief. Whether you take advantage of a debt relief program such as debt consolidation or debt settlement, or commit yourself to take control of your finances and negotiate with creditors on your own – take positive steps today to get on the path to become debt-free.

Bankruptcy is generally considered to be the debt relief option of last resort. There are several types of bankruptcy: Chapter 7 (straight bankruptcy or liquidation), Chapter 13 (reorganization of debts), and Chapter 11 (debt reorganization normally used by a business or partnership). While a successful bankruptcy can provide a fresh financial start – individuals or businesses should carefully consider bankruptcy before proceeding because of its long-term financial implications.

Pros of Bankruptcy

Debtors given a fresh start – a new financial lease on life

Upon filing Chapter 7 or 13, collection efforts must stop

Debts discharged. Creditors forgive most unsecured debts

Your home, auto, and other essentials may be protected

Wages you earn after bankruptcy go to you, not creditors

From bankruptcy filing to relief takes about 3-6 months

Cons of Bankruptcy

Bankruptcy stays on your credit report up to 10 years

Makes it difficult to obtain credit for home, auto, and more

Requires forfeiture of your existing credit cards

You lose property not exempt from sale by trustee

Doesn't discharge student loans, tax debt, alimony

Debt option of last resort that can be embarrassing

Bankruptcy Summary

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Bankruptcy

Summary

While bankruptcy is a debt relief option that has been able to provide a fresh start for many individuals, families, and businesses – it is a serious decision that should be carefully considered with the assistance of a financial advisor or attorney who can help determine if bankruptcy is the proper course of action.

Prior to 2005, those filing bankruptcy could choose the type of bankruptcy they preferred – and most elected to file Chapter 7 straight bankruptcy (liquidation) over Chapter 13 (structured repayment). However, rules enacted in 2005 now requires those filing Chapter 7 to pass a "means test" – to qualify, they must earn equal to or less than the average monthly income for a family of their size in their state.

In addition, before you can file for Chapter 7 or Chapter 13 bankruptcy, you are now required to complete credit counseling with an agency that has been approved by the United States Trustee's office.

While bankruptcy plays a vital role to help rescue individuals and businesses, it is important to recognize that it's not the only debt relief option. A debt specialist can provide more details on debt relief alternatives to bankruptcy as part of your free debt relief analysis and savings estimate.

Disclaimer - FloridaDebtRelief.org does not provide direct debt adjustment services, but upon request,
serves as a locator service for residents of Florida. For debt consolidation programs, where permissible by law, companies may charge a one-time enrollment fee typically from $25 up to $75 for account establishment and for debt relief proposals submitted on your behalf to each of your creditors. Monthly program administration fees will vary from $5 but no greater than $75 depending on your state of residence and/or the number of creditors who agree to accept proposals and become enrolled in the program. Fees subject to change if permissible by law. For debt settlement programs, by law, you may not be charged any fee until a debt settlement is arranged on your behalf, you approve the settlement, and at least one payment is made towards the settlement.

Not all consumers are able to complete debt relief programs for various reasons, including their ability to save sufficient funds. The use of debt resolution services could negatively impact your credit and may result in legal action on the part of creditors or collectors for unpaid balances. Consumers enrolled in debt consolidation programs who fail to adhere to the terms of their debt management plan (DMP) may forfeit the benefits of debt relief and revert to the terms of their original creditor agreements. Read and understand all program materials prior to enrollment. Please contact a debt relief specialist for complete program details.

Your debt relief analysis and savings estimate is free, and you are under no obligation to enroll in, or purchase, any product or service.

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